Ceding Company

Filed Under »
Dictionary Says

Definition of 'Ceding Company'

An insurance company that passes the part or all of its risks from its insurance policy portfolio to a reinsurance firm. Passing off risk in this manner allows the ceding company to hedge against undesired exposure to loss and frees up capital to use in writing new insurance contracts.

The ceding company retains liability for the reinsured policies, so although claims should be reimbursed by the reinsurance firm, if the reinsurance company defaults, the ceding company may still have to make a payout on reinsured policy risks.

Investopedia Says

Investopedia explains 'Ceding Company'

Insurance is a highly regulated industry which requires insurance companies to write certain semi-standardized policies and maintain sufficient capital as collateral against losses. Insurance companies can use reinsurance to allow them more freedom in controlling their operations. For instance, in cases where the insurance company does not wish to carry the risk of certain losses in a standard policy, these risks can be reinsured away. An insurer can also use reinsurance to control the amount of capital it is required to hold as collateral.
Search results for

'Ceding Company'

  • When Things Go Awry, Insurers Get Reinsured

    http://www.investopedia.com/articles/pf/08/reinsurance.asp
    ... losses. Here, ABC Life Insurance Co. is the primary insurer or ceding company,
    whereas XYZ Reinsurance Co. is the reinsurer. The ...

  • The Fall From Glory: Delisting Brands - Investopedia.com

    http://financialedge.investopedia.com/financial-edge/0212/The-Fall-From-Glory-Delisting-Brands.aspx
    ... the company's stock price tumbled 92%. A&P does continue to sell groceries, much
    in the same way that Portugal maintains a navy several centuries after ceding ...

  • Vale Still Looks Iron-Clad

    http://stocks.investopedia.com/stock-analysis/2010/Vale-Still-Looks-Iron-Clad-VALE-X-PKX-RIO-BHP-FSUMY1029.aspx
    ... How happy will the Chinese be to see another mining company trying to crowd into ...
    Xstrata, Rio Tinto (NYSE:RIO), or BHP Billiton (NYSE:BHP) are ceding Africa to ...

  • Digital May Not Solve GameStop's Biggest Problem

    http://stocks.investopedia.com/stock-analysis/2011/Digital-May-Not-Solve-GameStops-Biggest-Problem-GME-NFLX-AMZN-BBY-MSFT-ERTS-CSTR0824.aspx
    ... retail operations - ceding the in-store fight to big box retailers like Best Buy
    (NYSE:BBY) or Wal-Mart (NYSE:WMT). What then of the company's relationships ...

  • It Will Take Time To Fix Campbell Soup

    http://stocks.investopedia.com/stock-analysis/2011/It-Will-Take-Time-To-Fix-Campbell-Soup-CPB-GIS-THS-K-KFT-PEP-HNZ1128.aspx
    ... s (NYSE:K) Keebler and Kraft's (NYSE:KFT) Nabisco are ceding nothing to ... Management
    seems to understand that the company has, for too long, longed to boost ...

  • How A Eurasian Union Could Control The World's Energy ...

    http://financialedge.investopedia.com/financial-edge/1111/How-A-Eurasian-Union-Could-Control-The-Worlds-Energy.aspx
    ... threaten consortiums such as the Azerbaijan International Operating Company, which
    includes BP ... former brethren are not overly excited about ceding political or ...

  • How The US Automobile Industry Has Changed

    http://www.investopedia.com/articles/pf/12/auto-industry.asp
    ... In 1909, a Ford cost $825 and the company sold 10,000 of them that first ... This colossal
    failure reflected the slump in the US economy, and the ceding of market ...

  • Avoiding British Banks On The Dole

    http://stocks.investopedia.com/stock-analysis/2008/Avoiding-British-Banks-On-The-Dole-BCS-HBC1016.aspx
    ... Barclays' move suggests its acknowledgement of the danger of ceding ownership stakes
    to ... its tier 1 capital ratio is 8.8% suggesting that the company has enough ...

Related Articles

Bank Rates
Product Today Last Wk
$10K MMA 0.50% 0.51%
MMA 0.45% 0.46%
6 Month CD 0.46% 0.47%
1 Year CD 0.70% 0.75%
5 Year CD 1.46% 1.46%
1 Year Jumbo CD 0.66% 0.67%
Rate data provided by Bankrate
Product Today Last Wk
$30K HELOC 4.59% 4.60%
$30K Home Equity Loan 5.74% 5.77%
$50K Home Equity Loan 5.45% 5.50%
$50K HELOC 4.24% 4.24%
$100K Home Equity Loan 5.41% 5.46%
$100K HELOC 4.13% 4.13%
Rate data provided by Bankrate
Product Today Last Wk
30 Year Fixed 3.80% 3.80%
15 Year Fixed 3.09% 3.11%
1 Year ARM 3.54% 3.53%
30 Year Fixed Jumbo 4.38% 4.38%
5/1 ARM 2.65% 2.69%
3/1 ARM 2.69% 2.69%
Rate data provided by Bankrate
Product Today Last Wk
60 Month Used Car Loan 4.51% 4.51%
48 Month Used Car Loan 4.35% 4.35%
48 Month New Car Loan 3.24% 3.24%
36 Month Used Car Loan 4.34% 4.36%
36 Month New Car Loan 3.11% 3.13%
60 Month New Car Loan 3.35% 3.34%
Rate data provided by Bankrate
Partner Links